As soon as the announcement of the (π)pi coin on the currency exchange was released, it caused heated discussions among media people and currency practitioners. In the subconscious of many people in the currency circle, participating in PI coins is to engage in pyramid schemes. How to judge whether pi coins are pyramid schemes? What are the legal risks of participating in PI coins? I will share my views with you through this article below.

my country's determination of the crime of organizing and leading pyramid schemes

my country's Criminal Law Second Article 124 stipulates that in the name of promoting goods and providing services, the organization and leadership require participants to be qualified to join by paying fees or purchasing goods and services, and form levels in a certain order, directly Or indirectly, the number of development personnel is used as the basis for remuneration or rebate, and the participants are lured and coerced to continue to develop others to participate, defraud property, and disrupt economic and social order, which constitutes the crime of organizing and leading pyramid schemes.

In combination with the "Opinions of the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Organizing and Leading Pyramid Selling Activities" (hereinafter referred to as the "Opinions" ) The following four aspects should be paid attention to in determining whether it constitutes the crime of organizing and leading pyramid schemes.

1. Project profit model

MLM activities mainly pay threshold fees through participants. Or obtain the qualification to join by purchasing goods or services. In other words, participants can participate by paying the entry fee directly. For the purchased goods or services, the cost is often far beyond the real value of the product itself, such as buying plus token's brick-moving dog, NFT and other virtual products at a high price. , Buyers do not trade for some purpose, but obtain qualifications for joining through this model.

2. The level and number of people of the project

Article 1 of the "Opinions" stipulates that the organization If there are more than 30 internal pyramid schemes and the level is above 3, the organizers and leaders shall be held criminally responsible. In other words, pyramid schemes need to meet the hierarchy of 30 people at level three.

The identification of organizers and leaders: mainly includes those who initiate, plan and manipulate pyramid schemes; those who assume management, coordination and other responsibilities , persons who undertake publicity, training and other responsibilities; have been criminally punished for organizing and leading pyramid schemes,Or those who have been subject to administrative penalties for organizing or leading pyramid schemes within one year, and directly or indirectly develop more than 15 people and have a level three or above; as well as other implementation of pyramid schemes, establishment of pyramid schemes, Expand and other key players.

Therefore, only organizers and leaders in pyramid schemes that meet the above provisions will be held criminally responsible, and ordinary participants do not constitute a crime.

3. The logic of remuneration and rebate of the project

Article 5 of the "Opinions" stipulates, The organizer or leader of the pyramid scheme activities develops personnel and requires the developed personnel of the pyramid scheme to join, form an up-down relationship, and calculate and pay the online remuneration based on the sales performance of the pyramid scheme, and make illegal benefits, it is " Team remuneration” pyramid scheme.

Simple "team remuneration" pyramid schemes with the purpose of selling goods and based on sales performance are not treated as crimes.

In form, the "team remuneration" method is adopted, but in essence, it is a pyramid scheme that "using the number of development personnel as the basis for remuneration or rebate", and constitutes organization and leadership Crime of pyramid schemes.

4. Whether the project has the purpose of defrauding property

The essence of pyramid scheme is to deceive, To obtain the participants' property for the purpose of illegal possession, pyramid schemes do not really make profits by selling goods or providing services, but need to continuously pull down the line and increase the scale of the organization to maintain projects.

The third article of the "Opinion" determines the defrauding property: the organizers and leaders of pyramid scheme projects use fabrication and distortion, fiction, exaggeration of business, investment, and service Projects and profit prospects, conceal the true source of remuneration, rebate or other fraudulent means, implement the acts stipulated in Article 224 of the Criminal Law, and illegally make profits from the fees paid by persons participating in pyramid schemes or the fees for purchasing goods and services If it is defrauded of property. Therefore, judging whether Pi coins are pyramid scheme crimes stipulated in my country's criminal law is mainly determined through the above four aspects based on the situation of the project itself.

What are the legal risks of participating in Pi coins

If Pi coins are found to constitute the crime of organizing and leading pyramid schemes, the following legal risks will be present on the exchange listing and retail investors participating.

1. Trading After Pi is recognized as a pyramid scheme, the Pi currency launched on the exchange is equivalent to providing a secondary level of transaction monetization. The market, for the exchange to issue announcements online and issue new coins, and also conduct financial management, trading competitions and other activities, it is likely to be considered as a promotional role in pyramid schemes, which will constitute the crime of organizing and leading pyramid schemes. Joint crime.

The exchange business personnel and other major participants who are responsible for communicating with the Picoin project will most likely be implicated.

People in Liyang City, Jiangsu Province In the court trial (2020) Su 0481 Minchu No. 147, in 2017, the defendants Zhang and Qian introduced a mobile software called π to the plaintiff Ma, which has product trading transactions between registered members. , financial management and other functions. After the plaintiff Ma Moumou registered, the defendant Wu Moumou transferred 134,250 yuan to purchase 3,000 π coins. Later, the plaintiff and the defendant Qian Moumou filed a dispute over π software and filed a lawsuit with the court, requesting the three defendants to return the investment funds.

Finally, the court found that the plaintiff's transfer and payment to the defendant Wu Moumou was generated due to the transaction between the plaintiff and the defendant Wu Moumou's π coins, and the π coins belong to the internal accounts of the registered members of the π platform. The transaction of virtual currency in the network does not have the same legal status as currency and cannot and should not be circulated and used in the market as currency. Although the plaintiff's behavior of investing in and trading virtual currency in the network is personal freedom, it should not be protected by law. The investment risks arising from this should be borne by them.

For participating in virtual currency pyramid schemes, in addition to being criminally punished for suspected organizing and leading pyramid schemes, many Investors also want to recover losses through civil litigation, but basically they will not be protected by law because currency-related investment activities are not protected by law. The pyramid schemes of projects involve criminal crimes and do not fall within the scope of civil case acceptance, and the prosecution is rejected.

So investors should be more careful when participating in such projects, carefully identify them, and invest with caution.